The french ‘gilets jaunes’ movement gives businesses the blues


Initial indications suggest that business activity in France has been hard hit by the ‘gilets jaunes’ movement. The flash PMI (1) indices have fallen sharply since the nationwide demonstrations began, whereas across Europe they have only slipped slightly.

Although the fall in the manufacturing sector from 50.9 to 49.7 reflects the ongoing downtrend seen in previous months, the same cannot be said for the service sector. This fell from 55.1 down to 49.6, the largest drop seen since the autumn of 2011 when the eurozone crisis was in full swing.


These figures are based on flash estimates of the PMI indices and there is hope that a perhaps calmer second half to the month will improve the numbers. In addition, this month’s estimates were published on 14 December instead of 21–23 of the month. We can deduce that fewer companies than usual have responded, potentially distorting the real picture.

Following economic disruption in the first quarter of 2018 due to Germany’s particularly fierce flu epidemic, in the second quarter due to French strike action, and in the third quarter due to the impact of transitioning to stricter car-pollution testing, will the ‘gilets jaunes’ movement hit economic growth in France and the eurozone in this fourth and final quarter? One thing is for sure: the various specific shocks across Europe in 2018 make the economic landscape difficult to decipher.

PMI (1): Purchasing Managers’ Index, an indicator of economic health for manufacturing and service sectors

The opinion expressed above is dated December 19th 2018, and liable to change.

This document is not pre-contractual or contractual in nature. It is provided for information purposes. The analyses and descriptions contained in this document shall not be interpreted as being advice or recommendations on the part of Lazard Frères Gestion SAS. This document does not constitute an offer or invitation to purchase or sell, nor an encouragement to invest. This document is the intellectual property of Lazard Frères Gestion SAS.